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Local tax on meals starting to pay off

Option not for all towns, though

By Calvin Hennick
Globe Correspondent / July 21, 2011

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State numbers show that some area cities and towns have collected hundreds of thousands of dollars or more over the last two years through a local-option tax on restaurant meals.

But officials in other local communities say they don’t need the cash, at least not badly enough to implement a new tax.

The Legislature passed a law in 2009 that allowed cities and towns to impose a 0.75 percent tax on restaurant meals, as well as an extra 2 percent tax on hotel occupancy, as a way to cushion cutbacks in local aid. About half of the state’s 351 communities have adopted the meals tax.

Figures from the state Department of Revenue for the 2011 fiscal year, which ended June 30, show that Framingham brought in $1.1 million from the meals tax, while Waltham collected $862,000. Among other area communities with significant proceeds from the levy, Brookline brought in $832,000; Natick, $716,000; Wellesley, $431,000; Watertown, $393,000; Needham, $360,000; and Franklin, $347,000.

Marlborough, Milford, and a host of smaller communities in the area haven’t adopted the tax.

“We’re fiscally sound,’’ said Arthur Vigeant, president of Marlborough’s City Council, by way of explanation for bypassing the tax. “We’ve been very fortunate. We’ve had no layoffs. The council has been fairly conservative and not spending beyond our means, not writing checks we can’t cover, not starting projects we can’t afford.

“We’ve just been very prudent, and tried to plan the best we can in getting through these bad times,’’ Vigeant added.

Louis Celozzi, Milford’s town administrator, said there hasn’t been a recent push there to adopt the tax. “We’re in fairly decent financial shape, and we’re pretty proud of that,’’ he said. “We’re fortunate to be in a situation financially that we don’t have to burden our residents with an additional tax.’’

Other area communities that do not have the tax include Acton, Ashland, Ayer, Bellingham, Bolton, Boxborough, Boylston, Carlisle, Dover, Dunstable, Groton, Harvard, Holliston, Hopkinton, Lincoln, Littleton, Medfield, Medway, Northborough, Pepperell, Sherborn, Shirley, Southborough, Stow, Upton, and Weston.

Some cities and towns that have imposed the tax have set aside the money for a specific purpose. In Natick, for example, the money is going into a special fund for capital expenses, and Town Meeting approval is required before it can be spent.

“We do feel very good about the transparency that our approach has brought to these taxes,’’ said Natick Town Administrator Martha White. “Because we’re putting them into a stabilization fund, the community is seeing how much money is being generated and where that money is going. I think that’s helped make it palatable for the community.’’

In Brookline, the tax money is going toward pension obligations. Sean Cronin, the deputy town administrator, said the town would have had to lay off employees if it hadn’t implemented the meals tax, and residents haven’t complained about higher restaurant bills. “It’s been very quiet,’’ he said.

In some communities with few restaurants, the potential revenue from the tax has been deemed too small to make it worth the bother.

“It was not a significant source of revenue for Weston,’’ said Town Manager Donna VanderClock. “There’s just so few that selectmen chose not to go forward with it.’’

Robert Bliss, spokesman for the Department of Revenue, said state meals tax receipts are up this year over last year, indicating that it hasn’t deterred people from going to restaurants.

Bliss said he expects the number of communities levying the local meals tax will increase slowly in the coming years.

“I think that the communities that haven’t done it are probably taking a wait-and-see attitude, if they’re predisposed to do it at all,’’ Bliss said. “It’s really their call. That’s the beauty of local government in Massachusetts. You get to make those decisions on the ground level.’’

Calvin Hennick can be reached at calvinhennick@yahoo.com.